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- Tesla sales have fallen sharply in Germany, France and Britain.
- The appearance of the new Model Y did not boost sales.
- Elon Musk's actions may deter buyers of electric cars.
Tesla sales fell sharply last month in several major European markets, including Germany, the UK and France. The decline followed a tough year for the automaker, which sold 2023 million cars worldwide in 1,78, its first annual sales decline in more than a decade. While CEO Elon Musk’s increasingly polarizing behavior could be a factor in January’s poor performance, broader market forces are likely at play as well.
Tesla's problems in Germany and abroad
In Germany, Tesla sold 1277 cars last month, a significant drop of 59,5% compared to January 2024. Last year, electric car sales in Germany fell sharply after the government scrapped generous subsidies that had supported sales.
Musk's controversial behavior, including a hand gesture during President Donald Trump's inauguration celebration that drew online comparisons to a Nazi salute, as well as his ongoing support for a far-right political group in Germany, may have further reduced demand for Tesla's electric vehicles.
Tesla sales are not just falling in Germany. In France, Tesla sales fell by 63%, with just 1143 new cars registered. In the UK, Tesla sales fell by 12%, and while that doesn't sound like a huge drop, it came despite overall electric vehicle sales in the market growing by 35%. Tesla also reported sales drops of 44% and 38% in Sweden and Norway, as well as a 42% drop in the Netherlands.
Market changes and questions to Door Design Y
There are likely several other factors unrelated to Musk contributing to Tesla's recent sales decline.
In addition to the ongoing global economic uncertainty, many potential electric car buyers in Europe may be waiting for the recently updated Model Y, one of the continent's best-selling cars.
With a refreshed design, updated interior, and improved driving dynamics, many consumers will likely hold off on purchasing until the new Model Y is available in all trim levels, instead opting for the expensive Launch Edition.
However, it could be argued that Tesla's discounts on the existing Model Y, which is still in production, could counteract these fluctuations, prompting some buyers who would rather save money than wait for the latest version.
In late January, a poll by the British publication Electrifying found that 59% of local electric car owners and those considering buying an electric car had held back from buying a Tesla because of Musk’s recent actions. A survey of Swedish consumers also found that the share of those who had a negative view of Tesla had risen from 47% to 63%. Reuters reported that the number of locals who had a positive view of the brand had also fallen from 19% to 11%.
Tesla's dominance in the electric car market is not going away, but between changing subsidies, increasing competition, and a CEO who never seems to stop making headlines for the wrong reasons, the road ahead looks increasingly bumpy.
